The Federal Reserve Clown Show

The dollar, like all unbacked paper and digital money, is a confidence game.  That’s why we are watching the Federal Reserve with horror.  Behind the curve doesn’t begin to describe it.

It’s a clown show!

It’s almost as if they are trying to destroy confidence in the dollar.  But whether they are doing it on purpose or just lurching about in their confusion doesn’t matter right now.

Consumer confidence is in the tank.  The University of Michigan’s consumer confidence index for June is at an all-time low, mostly due to inflation.

We don’t think anyone should be surprised.  Just weeks ago, chairman Jerome Powell scoffed at the idea of the Fed needing to raise interest rates 75 basis points (three-quarters of a percent).

Yet this week the Fed did just that.

That comes hard on the heels of former Fed head Janet Yellen explaining that she just didn’t really understand inflation.  But none of them do.  It’s as though Fed officials have never heard of the quantity theory of money – the more dollars they print, the less each is worth.  It’s as though they’ve never really mastered supply and demand.

So now while the American people are suffering pain at the pump and America itself is being decapitalized, the Fed keeps stalling for time.  Instead of taking serious measures, it hopes that inflation will disappear on its own.  For example, the Fed has said it needed to unwind its balance sheet, to undo some of the $8 trillion it has printed in the last 14 years.  But if it is important to do that, why are they stalling?  If it will help, why didn’t they start right away?  They have no sense of urgency.  They don’t pump their own gas.  They dine for free in the Marriner Eccles building dining room.  So now they are finally dipping their toe into the unwinding process but won’t really ramp up until this fall.  Mañana, mañana, mañana.  

While the Fed dilly-dallies, blood is running on both Main Street and Wall Street.  Inflation keeps ratcheting up, up, up.  Producer prices are rising at double-digit rates.  Mortgages rates have doubled, leaving both home buyers and sellers in a lurch.  And the stock market has lost $11 trillion already this year.  

It’s a clown show, that’s for sure.  Don’t be victimized.  If you haven’t moved a substantial share of your assets into gold and silver, it’s certain you will continue to be victimized by fiat, made-up, unbacked paper or digital money.  

The clown show will make you poorer.